Business and the Business Environment: M&S

Business and the
Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................4
P1) Different Types of Organisations With their Scope and Size..........................................4
P2) Size and Scope of Different Types of Organisations.......................................................6
M1) Linking of Size, Scope and Structure to the Organisational Objectives........................7
P3) Interrelationship Between Different Functions of Marks and Spencer and Link to the
Organisational Objectives......................................................................................................8
M2) Advantages and Disadvantages of Interrelationship Between Different Organisational
Functions................................................................................................................................9
P4) Impact of Macro Environmental Factors on the working of Marks and Spencer..........10
M3) Application of PESTLE Analysis on M&S..................................................................12
P5) Internal Strengths and Weaknesses, Opportunities and Threats of Marks and Spencer12
P6) Interrelation of Strengths and Weaknesses with External Macro Environmental Factors13
M4) Application of SWOT Analysis and Influence on Decision Making...........................15
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16

INTRODUCTION
Business Environment can be defined as the environment which consist of both internal
and external factors and impacts upon the business in both positive and negative ways (What Is
Business Environment? - Definition & Factors, 2019). The impact of these factors mainly
concerns on influencing the working of the company. In the internal factors, it consists of
employees, management, directors, workers, managers. While in the external factors, it consists
of clients, government, customers, suppliers and many more that could create impact upon the
working of an organisation. The company chosen for the completion of this assignment is Marks
and Spencer which is a UK based Multinational Company. It was founded in the year 1884 and
is headquartered in Westminster, London. The following assignment will start covering the
different types and purpose of organisations, size, scope, their legal structure. In addition to this,
the assignment will also make its focus on the interrelation between the different functions of an
organisation and their link to the organisational objectives. Additionally, the focus will also be
made on the impact of macro environmental factors on the working of the company. At last, the

discussion will be made about the internal strengths and weaknesses of the company and their
link with the macro environmental factors.
MAIN BODY
P1) Different Types of Organisations With their Scope and Size
There are different types of organisations which are explained as under:
Private Sector Organisations:
These type of organisations can be defined as those organisations which are wholly
owned and controlled by private individuals (Andersson, Forsgren and Holm, 2015). The
government does not have any sharing in these organisations. The organisation used in the
following assignment is Marks and Spencer.
Purpose
The main purpose of the company is to provide their customers with high quality clothing
products, home décor and food products. The customers of the company are middle class and
upper class people. The main objective of this organisation is to make improvement in the sales
of the company with the help of self motivated employees towards their work.
Types of Private Sector Organisation:
Sole Proprietorship: In the following type of private sector organisation, the business is
wholly owned and controlled by a single private individual and all the rights to take decision lies
in the hands of that individual only. The example of this type of private sector organisation is the
small business owners (Apăvăloaie, 2014).
Partnership: In this type of private sector organisation, business owned and controlled
by two or more number of individuals with the purpose of earning profit and satisfying the needs
and wants of customers. The power to take decisions lies in the hands of the partners in the firm.
The liability of the partners also depends upon the type of partnership such as in case of general
partnership the partners have unlimited liability and in case of limited liability, the partners have
liability to the extent to which they have had invested in the business. The maximum number of
partners in the partnership firm is 40.
Company: It can be defined as the form of organisation in which the organisation do
have a separate legal existence other from their owners. The company do consist of unlimited

liability and unlimited number of members in the firm. So, the company does not have any
impact upon the coming and going of the partners of the company.
Legal Structure
In order to perform the activities of the company in an efficient and effective manner,
Marks and Spencer makes use of Public Limited Company legal structure in its working.
Public Sector Organisation
The following are those organisation in which the ownership lies in the hands of Central
or the State Government or partially with the State or partially with the Central Government of a
country. In other words, it can also be said that these are the organisations in which the 51% of
the shares of the organisation lies in the hands of the government. The income generation for the
companies under this sector is by means of collecting taxes, fees or through financial transfers
from other levels of the government. For example, CPS (Crown Prosecution Services). The
following public organisation prosecutes the criminal cases that the police and other institutions
have investigated with the purpose of delivering justice.
Purpose
The purpose of this public organisation is to provide justice in the society so that the
people in the country could live in freedom and security.
Objectives: The objective of CPS is to provide the best judicial services so that the right people
could prosecuted for right offences (Botha, Kourie and Snyman, 2014).
Types of Public Sector Organisation:
Central Government: These are those organisations which are regulated by the central
government of a country. These are mainly related to the formation of policies and rules in the
country.
State Government: These are those organisations which are regulated by the state
government of a country and these are mainly related to the formulation of some specific rules
and regulation to be followed within a state.
Legal Structure
The main motive of CPS organisation is to serve the people in order to provide them
benefit. In the legal structure of CPS, the various posts are included out of which the main is the
Chief Inspector, Inspectors and some more which completely forms the legal structure of the
organisation (Cairncross, 2014).

Voluntary Sector Organisations:
These are the organisations which works with the motive of social welfare. These type of
organisations do not work with a motive to earn profit. Examples can be charity, trust,
foundations and non government organisations. Oxfam is the voluntary organisation whose main
focus is on removing poverty. This organisation removes and addresses the structural cause of
poverty and related injustice and work primarily through accountable organisations.
Purpose
This non voluntary organisation is working for the welfare of poor people so that they
could be able to fulfil their basic needs such as food, water, shelter, clothes.
Objective: The objective of this organisation is to remove poverty and make the people able to
fulfil their basic needs.
Types of Voluntary Organisations: The following is the description of types of voluntary
organisations which are discussed as under:
Trustee: It can be defined as the person or individual provided with the right to control the
administration of a particular sector.
Charity: The following type of organisation helps the needed people by raising money from
people or organisations or from any other source.
Legal Structure
This firm is following the Charity legal structure. The rules and regulations followed by
charity organisations do applies on this also.
P2) Size and Scope of Different Types of Organisations
The size and scope of different firms are distinct from one another in some or the other
ways. These are described as under:
Private Limited: The main motive of the firms operating under the private sector is to earn
profit. So the description of the size, scope, mission, vision, objectives of Marks and Spencer is
described as under:
Size: The number of stores of the company are approx 1463 all over the world and the revenue
for the year 2019 is £ 10,337 million (Cavusgil and et. al., 2014).
Scope: The company is operating not only in UK but also in other countries with more than
35000 product lines.
Vision: It is to gain leadership in the market by satisfying the needs and wants of the customers.

Mission: The mission of Marks and Spencer is to provide aspirational quality of product and
services accessible to all the customers.
Public Limited Company:
The selected public company is CPS (Crown Prosecution Services) and the description of
size, scope, objectives is provided as under:
Size: The number of employees working currently in the organisation are approx 6000 and the
annual budget of the company for the year 2012-2013 is £592 million.
Scope: The operations of the company are carried out all over the UK.
Vision: The vision of CPS is to provide justice in the society so that people can live in freedom
and security.
Mission: The mission is to make right decisions without fear, favour and prejudice and
delivering right prosecution for right offense.
Business Objectives: The main objective of this organisation is to make the country free from
crime.
Stakeholders: The stakeholders of this organisation are the governments, employees, citizens of
the country, management and some more.
Voluntary Sector:
The companies covered under this sector are providing social services and work for the
welfare of the society as a whole. The description of the size and scope and objectives of Oxfam
are provided as under:
Size: Along with this firm, 20 others are also working for the welfare of the society.
Scope: The company is making its operations in the UK itself.
Products and Services: This organisation provides the needful people with the basic
requirements such as food, water shelter, clothes and some more (Charter, 2017).
Mission: The mission of the company is to reduce poverty to the possible extent.
Vision: The vision of the organisation is to make the world without poverty.
Business Objectives: To provide the needful people with the help so that they could live a better
life.
Stakeholders: The stakeholders of the company are directors, volunteers, government, people an
some more.

M1) Linking of Size, Scope and Structure to the Organisational Objectives
The size, scope and structure defines about the range of the operations carried out by the
organisation and structure provides the company with the passing of information and the
feedback form the management to workers and from workers to management which makes the
communication effective so as to solve the problems faced by the employees in carrying out the
tasks they are provided with. So with the help of support from management, it will become easy
for the workers to achieve get succeed in their tasks and hence the organisational objectives are
achieved with the efficient working of employees.
P3) Interrelationship Between Different Functions of Marks and Spencer and Link to the
Organisational Objectives
Organisation consist of different function and department. Each and every department
play a very important role in survival and growth of organisation. Mark and Spencer company is
an organized group of people where everyone is performing different task in different
department of company to achieve common objective of organisation (Cohen and Kietzmann,
2014). No company can survive in market with one department or without no relationship
between various department. Mark and Spencer department are interrelated to each other
through many ways. Interrelation of various department with others are mention below.
Marketing interrelationship with production department
Marketing department is responsible for maintain positive customer relationship and
increasing sales of company whereas production department is mainly responsible for
manufacturing of products. Mark and Spencer need to balance between relationship of
marketing and production department as products manufactured by company is for sales in
market. Marketing department conduct proper market research and identify need and demand of
customers. This department is responsible for communicating customer wants to production
department. So that production department can manufacture products according to customers
demand and Mark and Spencer will able to satisfy their customers. Marketing department will
also predict sales and measure quantify of goods to be manufactured by production department.
Finance interrelationship with Human resource department
Finance and human resource department needs to work closely with each other to
achieve organisation objective of Mark and Spencer. Primary role and responsibility of these
department are to maximize profits to company (Dima, Grabara and Modrak, 2014). Finance

department is mainly concerned with money cost and human resource department will affect
relationship between people of all department. Finance department provide budget to human
resource department for its function. Human resource department of Mark and Spencer will hire
all employees for finance department. For effective function of company it is important to select
high qualified candidates for company who can rightly mange all assets and cost of Mark and
Spencer.
Human resource interrelation with marketing department
Human resource major function includes recruiting and training employees or
maintaining peaceful work environment in company. Marketing department of Mark and
Spencer need to maintain positive relationship with human resource department as they will be
responsible hiring well qualified employees with right ability and skill set required by effective
working or department. Human resource department will provide training to marketing and sales
team to enhance their skills and knowledge. These departments are interrelated for department
maintaining strong marketing and human resource team which leads to achieving Mark and
Spencer goals.
Production interrelation with finance department
Finance department deals with all kind of monetary transfer where as production
department is responsible for manufacturing goods. Finance and production department are both
integral part of Mark and Spencer (Erasmus, Strydom and Rudansky-Kloppers, 2016).
Production department ensures that respective company is never out of stock whereas finance
ensure that company have enough capital resources all time. For manufacturing products of
Mark and Spencer, its requires raw material, machinery and lobar all require monetary
expenditure which is function of finance. If production of goods does not happen properly than
Mark and Spencer will not be able to generate sales and will ultimately affect finance
department.
Hence it is very important that every department of Mark and Spencer work closely with
each other and improve overall functioning of business. These department have different
functions and contribute in different ways. Mark and Spencer should maintain a balance
between all departments because if any one function is neglected than it will leads to problem
for whole organisation. All departments are interrelated with each other and work with motive to
achieve objective of company.

M2) Advantages and Disadvantages of Interrelationship Between Different Organisational
Functions
The advantages of interrelationship in between different organisational function are
provided as under:
 Grouping the employees with the help of their specialisation in the field with help the
company in ensuring the dependable level of departmental competence.
 It also helps in the improvement of the organisational speed of the company as it helps in
the training of new employees in a faster way.
The disadvantages of this interrelationship in between different organisational functions are
provided as under:
 As the non performance of tasks within the time specified can lead to disputes in the
organisation as a part of dependency of one department over the other.
 It also eradicates the coordination level of employees as the disputes incidents will lead to
reduction in the coordination among employees of different department.
P4) Impact of Macro Environmental Factors on the working of Marks and Spencer
In order to know about the impact of macro environmental factors on the working of
Marks and Spencer the use of PESTLE Analysis is done. In accordance with this analysis, it is
used in order to know about the impact of macro environmental factors on the working of an
organisation which are described as under:
Political Factors: These are those factors which impacts upon the working of a organisation due
to changes in the government policies, rules and regulations in an organisation. The impact of
these factors depends upon the change in the policies of the government whether they are in
favour or against the company (Georgescu and Popescul, 2015). The impact of this factor on the
working of Marks and Spencer is provided as under:
Positive: The positive impact on the working of the M&S is because of the political stability of
the country which makes the company able to formulate suitable policies essential for the smooth
working of the company.
Negative: In the international markets, the higher cost structure of the M&S is creating problem
and gas reduced the profit level of Marks and Spencer to much extent.
Economical Factors: These are those factors which impacts upon the working of an
organisation due to change in the economical factors such as the interest rates, inflation,

deflation, disposable income of customers, GDP and some more. The impact of these factors also
depends upon the nature of change occurred in the environment. These impacts are provided as
under:
Positive: In case, the interest of the banks decreases than this will impact upon the working of
the M&S as the profit margin of the company will increase and it will be able to provide the
customers their products and services at low prices.
Negative: The negative impact will be in the case when the disposable income of customers
tends to decline, this will also absorb the purchasing power of the customers and this will impact
upon the sales of the company and hence will create a negative impact on the working of the
M&S.
Social Factors: Thee are those factors which impacts upon the working of an organisation due to
changes occurred in the taste and preferences of people, feelings, beliefs and other constraints of
people. The impact of this factor is also provided as under:
Positive: In case the change in the taste and preferences of people are in the favour of M&S than
it will create a boom situation for the company and the sales of the company will tend to
increase.
Negative: The negative impact can decline in the sales of the M&S as the sales of the company
will decrease because the taste and preference of people are not in the favour of the company.
Technological Factors: These are those factors which impacts upon the working of an
organisation due to technological changes such as improvement in the ways of working,
improvement in the processes of the company and many more (Glova, Sabol and Vajda, 2014).
The impact of these factors are also discussed as under:
Positive: The use of social medial technology will help the M&S in making improvement in the
sales of the company. As in today's world a number of people are making use of social media so
this will help the company in making improvement in the sales of the company.
Negative: The negative impact could also be in this form as social media can also damage the
image of the M&s because with the help of social media, some wrong information can also be
presented in front of people which will damage the image of the company and will impact
negatively.
Legal Factors: These includes the various laws and regulations which are developed by the
government of UK for protecting the employees from different problems and exploitation. M&S

is following various laws and regulations associated with the employment such as equality act,
health and safety at work, fair compensation act etc. due to which the brand image along with the
employees satisfaction is increasing which is a positive impact for the firm. However the
company was previously involved in scandals associated with the fair wages among the men and
women due to which the company is getting negative impact in terms of reduced brand image.
Environmental Factors: These factors involves the concerns associated with environment such
as pollution, gas emissions etc. which can impact the environment negatively. M&S is a retail
firm due to which it uses a large amount of energy in their stores which is negatively impacting
the firm. However company has initiated a new regulation of paying 5 pounds for using the
plastic packets for carrying the products from stores which is positively impacting the firm. Also
M&S is aiming to reduce the energy emission by 20% till 2020 which is also positively
impacting the brand image of company (Kolk, 2016).
M3) Application of PESTLE Analysis on M&S
With the application of PESTLE Analysis done on Marks and Spencer, it has been clear
that there is a need for the company to follow the rules and regulations provided by the
government to avoid the interference of government in the working of the company. Moreover,
the company is required to make its focus on the technological improvements in the industry so
that the company could also develop strategies to deal with these situations. The working of the
company should also create the least possible impact on the environment and it also becomes
important for the company to make their contribution towards making the environment safety
and protection.
P5) Internal Strengths and Weaknesses, Opportunities and Threats of Marks and Spencer
In order to analyse about the internal capabilities and external opportunities and threats of
an organisation, the use of SWOT Analysis is done. The following analysis is used in order to
know about the strengths and weaknesses and opportunities and threats of an organisation. He
discussion of these are provided as under:
Strength Weaknesses
 Company have achieved a good brand
image in marketplace which have made
 Company mainly focuses on UK market
due to which it is not successfully

its strengthen across the world.
 Several private labels are using by
company such as Louis Vuitton, Vero
Moda etc. which have made strong
portfolio of firm in marketplace (Quinlan
and et. al., 2019).
 Management of Marks and Spencer
always focuses on innovations due to
which strong market share and
competitiveness is achieved by company
in marketplace.
 Around 910 stores in UK along with
80000 employees are working which
have made its strong presence in the
market.
representing itself in foreign market.
 Employees are not performing duties
properly due to which customer base is
reducing regularly.
 Revised tax rates in foreign nation is also
reducing the sales figures and
profitability of company.
Opportunity Threat
 Due to less trade barriers and high
stability of government company can
expand its business operations in
developing nations like India and China.
 Strong presence on online channels can
increase the profitability of firm in future
time period (Saleem, 2015).
 Making up gradation of clothing segment
can prove beneficial or organisation in
terms of profitability.
 Vital competitors like Zara and burberry
are providing tough competition to the
company and its profitability.
 Not using of advanced systems at
workplace can become threat for
profitability and sales figures of
organisation.
P6) Interrelation of Strengths and Weaknesses with External Macro Environmental Factors
The discussion of interrelation of strengths and weaknesses with macron environmental
factors is provided as under:
Political factor

Political factor are actually the degree of government involvement in functioning of
business. This external factor have impact on overall business activities of Mark and Spencer.
Strength: Mark and Spencer is properly following all rules and regulation set by government
and political party. Careful implementation of government polices are beneficial for respective
company.
Weakness: Regular changes in international trade law and policies have negative impact on
Mark and Spencer functioning. Trade restriction in many area by government is considered as
weakness for company.
Economic factor
This include gross domestic product, average national income, inflation rate, growth rate
of economy, prevailing interest rates of market etc. change in any of this factor or economy of
nation have a significant impact on Mark and Spencer business activities (Schaltegger, Hansen
and Lüdeke-Freund, 2016).
Strength: Economic factor is strength for Mark and Spencer as it depends upon the growth rate
and GDP. Company can charge its interest rate in this business activities.
Weakness: At the time of recession Mark and Spencer have to face major problem and this
directly impact business process. It influence purchasing attitude of customer also.
Social factor
These are cultural and social factors of demographic. Social factor include age, gender
ratio, population growth, urban-rural divide, employment rates, health status, preferences etc of
selected population.
Strength: Mark and Spencer have vast range of variety of products and it include almost all age
group of people. This external factor is beneficial for company as it fulfil requirement of
customers (Shenkar, Luo and Chi, 2014).
Weakness: Social factor include change in taste of customer and trends. It can play negative role
in business as out dated products do not have any value in market.
Technological factor
Technological factors include new or updated technology for producing goods,
innovation in technology etc.
Strength: Mark and Spencer is using new technology and have strong IT team which help
company to update its technology regularly.

Weakness: Rival company using innovative technology can have negative impact on Mark and
Spencer as customers will get attracted to competitors products (Wheelen and et. al., 2017).
M4) Application of SWOT Analysis and Influence on Decision Making
From the SWOT analysis on Marks and Spencer it has been clear that the changes in the
environment of the company and in the policies of the government, there comes a need for the
company to make their policies in accordance with the changing environment so that the
company could avail the opportunities and eradicate the weak points and threats to the company.
For example, the tax rates are revised in UK due to which the tax burden on the company has
increased and due to this, it becomes important for the company to make their policies in
accordance with this change, otherwise it will impact negatively on the working of the company.
Due top this reason, with the change in the environment, there comes a need for the company to
make changes in their policies and procedures.
CONCLUSION
From the above assignment it has been concluded that there are many difference which occurs in
the scope, size and nature of business which is because of their suitability and purpose for which
they are formed. Additionally, it is also concluded that coordination and cooperation among
different departments is essential for the success of an organisation. The company should also
focus on the impact of internal and external factors so that suitable strategies could be formed in
order to deal with those situations. Lastly, it is also concluded that with the help of these factors
will become easy for the managers of an organisation to know better how to deal with different
situations that could increase their efficiency in the right way.

REFERENCES
Books and Journals
Andersson, U., Forsgren, M. and Holm, U., 2015. Balancing subsidiary influence in the
federative MNC: A business network view. In Knowledge, Networks and Power (pp.
393-420). Palgrave Macmillan, London.
Apăvăloaie, E. I., 2014. The impact of the internet on the business environment. Procedia
Economics and finance. 15. pp.951-958.
Online
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